British Petroleum Essay

2. IntroductionBP is one of the largest multinational corporations in the world. According to CNN (2011), BP is the fourth largest multinational corporation in the world and employs over 80,000 people and making annual revenue of $392 Billion. BP has massive influence on the global economic climate and has the operation capacity to affect stakeholders. This act will analyse BPS current stance using Porters volt forces. It will also establish who argon the most important stakeholders and designate strategies that loafer be used in future.3. Porters Five ForcesThis looks at he external factors that mass affect which include new entrants, buyers, suppliers, substitutes and competition and can affect productivity of a business as seen in appendage A.3.1 Threat of New EntrantsThe threat of new entrants into the anele and waste perseverance is relatively low. This is a result of the high capital exists and technology, dispersal channels, economies of scale, regulations and geo political barriers and the high levels of expertise required for exploration and extraction. (Mascarenhas, 1997) This makes it relatively well-off for the oil and gas industry to fend of potential entrants however the investing in relation to profit returns with suitable environmental and technical environment is relatively high.3.2 RivalryRivalry in the oil and gas industry is relatively high because of the resource based nature of the business. There is grueling competition to locate and secure drilling licenses between the major players and the cost of expedition and production is relatively high. The main source of competitive emolument in his industry is to cut down the costs of production per social unit produced.3.3 Substitutes for Oil and Gas ProductsThe threats of substitutes for oil and gas products are low and tally from wind, nuclear, hydroelectric and biomass. Wachsmith et al (2013) states that solar power, wind power and other substitutes for oil and gas pro ducts are not yet efficient enough to scrap oil and gas products as they can be affected by environmental factors. Other substitutes such as Nuclear power can cause devastating harm to the environment in the event of precious spillages and reparations would be extremely costly. However, BP is currently embarking on projects to diversify the range of their dexterity production sources into wind power and biofuels which yield less carbon emission.(BP, 2014)3.4 BuyersBuyers are both(prenominal) industrial and individual consumers. Consumer power is relatively low because suppliers guide an incentive to keep supply low in order to ascendency oil prices. Also OPEC has the power to limit the amount Oil in the market and can alter this to the benefit of the producer to achieve the highest thinkable price. (Radetski, 2012) The consumer is the price taker.3.5 SupplySupplier power in the oil and gas industry is high. This is because of the constraints attached to the supply of the outp ut by OPEC and countries resource focal point levels. (Radetski, 2012) This enables suppliers to control oil prices to an extent while working in unanimity to the regulations of overseeing organisations and countries of operations they can decide to seize BPS output if scathe and conditions of resource exploitation are not met.4. StakeholdersThe major BP stakeholders are suppliers, environmental organisations, countries of operation and oil production authorities organisations.5. ConclusionThis essay has disposed a short account of BPs stakeholders using Porters five forces as a model and identified the major stakeholders. This study has shown that suppliers, countries of operation and governing bodies play a major role in the success of BP. These decision suggest several courses of action for BP which include Abiding by the rules and regulations of both countries and governing organisations.Maintaining a frugal means of production and investing in more efficient methods of productionMaintain good relationship with presidency to secure more oil blocs. Caution should be taken when exploit to reduce hazardous environmental effects as they will chat for reparations and damage government relationship.6.AppendicesAppendix A Porters Five Forces (own source)